<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                              --------------------

                                    FORM 10-Q
                                   (Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For The Quarter Ended October 31, 2005, or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For The Transition Period from _______to_______


                         Commission File Number 1-14503




                           DECTRON INTERNATIONALE INC.
                ------------------------------------------------
             (Exact name of registrant as specified in its charter)


             Quebec, Canada                                        N/A
             --------------                                        ---
(State of Incorporation or other Jurisdiction of            (I.R.S. Employer
Incorporation or Organization)                              Identification No.)


           4300 Poirier Blvd., Montreal                           H4R 2C5
           ----------------------------                           -------
     (Address of principal executive offices)                    (Zip Code)


Registrant's telephone number, including area code: (514) 334 9609

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ].

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ].

                      APPLICABLE ONLY TO CORPORATE ISSUERS

As of December 14, 2005, there were 3,155,000 shares of common stock
outstanding.


<PAGE>



DECTRON INTERNATIONALE INC.


<TABLE>
PART I - FINANCIAL INFORMATION

<S>                                                                                                                  <C>
Item 1.  Financial Statements......................................................................................     4

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.....................     4

Item 3.  Quantitative and Qualitative Disclosures About Market Risk................................................     9

Item 4.  Controls and Procedures...................................................................................     9


PART II - OTHER INFORMATION


Item 1.   Legal Proceedings........................................................................................    10

Item 2   Unregistered Sales of Equity Securities and Use of Proceeds...............................................    10

Item 3.  Defaults Upon Senior Securities...........................................................................    10

Item 4.  Submission of Matters to a Vote of Security Holders.......................................................    11

Item 5.  Other Information.........................................................................................    11

Item 6.  Exhibits..................................................................................................    11


SIGNATURES.........................................................................................................    12
</TABLE>


<PAGE>



                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS


         Certain statements contained herein including, without limitation,
those concerning (i) the strategy of Dectron Internationale Inc. ("Dectron"),
(ii) Dectron's expansion plans and (iii) Dectron's capital expenditures, contain
forward-looking statements (within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") concerning Dectron's
operations, economic performance and financial condition. Because such
statements involve risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward-looking statements. Factors that
could cause such differences include, but are not limited to, those discussed
under the caption "Management's Discussion and Analysis of Financial Condition
and Results of Operations." Dectron undertakes no obligation to publicly release
the result of any revisions to these forward-looking statements that may be made
to reflect any future events or circumstances.


<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

See Pages F-1 through F-15.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Management's Discussions and Analysis of Financial Conditions and Results of
Operations ("MD&A") should be read in conjunction with the unaudited interim
consolidated financial statements for the nine month ended October 31, 2005 and
the audited consolidated financial statements and MD&A for the year ended
January 31, 2005. This MD&A is based on reported earnings in accordance with
United States generally accepted accounting principles (GAAP).

Dectron's interim consolidated financial statements have been prepared using the
same accounting policies as described in note 1 of Dectron's audited
consolidated financial statements for the year ended January 31, 2005. Please
refer to Note 2 of the interim consolidated financial statements for the nine
months ended October 31, 2005 for further information.

Quarterly reports, the annual report and supplementary information filed with
the U.S. Securities and Exchange Commission, including the annual report on Form
10-K and the quarterly report on Form10-Q and with the Canadian Securities
regulatory authorities, can be found on-line at www.sec.gov and www.sedar.com
respectively, as well as on our corporate Web site at www.dectron.com.

The information in this MD&A is current as of December 14, 2005

FORWARD-LOOKING INFORMATION

Certain statements contained in this MD&A constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
section 21E of the Exchange Act of 1934. Forward-looking statements include, but
are not limited to, Dectron Internationale's statements regarding liquidity,
anticipated cash needs and availability and anticipated expense levels. All
forward-looking statements included in this MD&A are based on information
available to Dectron Internationale on the date hereof, and Dectron
Internationale assumes no obligation to update any such forward-looking
statement. Dectron Internationale's actual results could differ materially from
those in such forward-looking statements.


CRITICAL ACCOUNTING POLICIES

Dectron's consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States (GAAP). These
accounting principles require us to make certain estimates, judgments and
assumptions. We believe that the estimates, judgments and assumptions upon which
we rely are reasonable based upon information available to us at the time that
these estimates, judgments and assumptions are made. These estimates, judgments
and assumptions can affect the reported amounts of assets and liabilities as of
the date of the financial statements, as well as the reported amounts of
revenues and expenses during the periods presented. To the extent there are
material differences between these estimates, judgments or assumptions and
actual results, our financial statements will be affected. The significant
accounting policies that we believe are the most critical to aid in fully
understanding and evaluating our reported financial results include the
following:

Revenue Recognition
Deferred Revenue

                                       4
<PAGE>

Intangible Assets and Goodwill
Foreign currency translation
Accounting for Income Taxes

REVENUE RECOGNITION

Dectron recognizes revenue for finished products when the goods are shipped and
title passes to the customer, provided that there are no uncertainties regarding
customer acceptance, persuasive evidence of an arrangement exist, the sales
price is fixed or determinable, and collectibility is deemed probable.

DEFERRED REVENUE

Dectron has sold extended warranty contracts covering a period of four to nine
years beyond the one year basic guarantee. The deferred revenue is recognized as
income over the four to nine year period on a straight-line basis commencing one
year from the sale of the contracts.

INTANGIBLE ASSETS AND GOODWILL

Dectron accounts for intangible assets and goodwill in accordance with Statement
of Financial Accounting Standards (SFAS) 142, "Goodwill and Other Intangible
Assets", which was adopted by Dectron on February 1, 2002 in accordance with
that statement, goodwill and intangible assets with indefinite lives are no
longer amortized, but rather tested for impairment at least annually. Goodwill
represents the excess of purchase price over the fair value of identifiable
assets acquired in a purchase business combination. Intangible assets with
estimable useful lives, consisting of patents, trademarks, and rights, are
amortized on a straight-line basis over the estimated useful lives of 5 to 15
years, and are reviewed for impairment in accordance with SFAS 144, "Accounting
for the Impairment of Long-Lived Assets".

Goodwill and intangible assets with definite lives are tested annually for
impairment in accordance with the provisions of SFAS 142.

Impairment of goodwill is tested at the reporting unit level by comparing the
reporting unit's carrying amount, including goodwill, to the fair value of the
reporting unit. The fair values of the reporting units are estimated using a
combination of the income or discounted cash flows approach and the market
approach, which utilizes comparable companies' data. If the carrying amount of
the reporting unit exceeds its fair value, then a second step is performed to
measure the amount of impairment loss, if any. Any impairment loss would be
expensed in the consolidated statements of earnings. The impairment test for
intangibles with indefinite useful lives consists of a comparison of the fair
value of the intangible assets with its carrying amount. When the carrying
amount of the intangible assets exceeds its fair value, an impairment loss would
be recognized for the difference.

Intangible assets with estimable lives and other long-lived assets are reviewed
for impairment when events or changes in circumstances indicate that the
carrying amount of an asset or assets group may not be recoverable in accordance
with SFAS 144. Recoverability of intangible assets with estimable lives and
other long- lived assets is measured by a comparison of the carrying amount of
an assets or asset group to future net undiscounted pretax cash flows expected
to be generated by the assets or asset group. If these comparisons indicated
that an asset is not recoverable, the impairment loss recognized is the amount
by which the carrying amount of the asset or the asset group exceeds the related
estimated fair value.

FOREIGN CURRENCY TRANSLATION

Dectron maintains its books and records in Canadian dollars. Foreign currency
transactions are translated using the temporal method. Under this method, all
monetary items are translated into Canadian funds at the rate of exchange
prevailing at balance sheet date. Non-monetary items are translated at
historical rates. Income and expenses are translated at the rate in effect on
the transaction dates. Transaction gains and losses are included in the
determination of earnings for the year.

                                       5
<PAGE>

The translation of the financial statements from Canadian dollars into United
States dollars is performed for the convenience of the reader. Balance sheet
accounts are translated using closing exchange rates in effect at the balance
sheet date and income and expense accounts are translated using an average
exchange rate prevailing during each reporting period. No representation is made
that the Canadian dollar amounts could have been, or could be, converted into
United States dollars at the rates on the respective dates and or at any other
certain rates. Adjustments resulting from the translation are included in the
accumulated other comprehensive income in stockholder's equity.

ACCOUNTING FOR INCOME TAXES

As part of the process of preparing our financial statements, we will be
required to estimate our income taxes in each of the jurisdictions in which we
operate. This process will involve estimates of our actual current tax exposure
together with assessing temporary differences resulting from differing treatment
of items, such as depreciation and amortization, for tax and accounting
purposes.

SELECTED FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                     October 31,     January 31,
                                                                                        2005            2005
<S>                                                                                    <C>             <C>
FINANCIAL POSITION

Cash and cash equivalents                                                              2,744,607       1,075,220
Total Assets                                                                          35,467,273      35,687,918
Total Debt                                                                             2,027,426       4,719,783


Shareholder's equity                                                                  11,658,246      11,317,367
- per common share                                                                          3.70            3.59

Working capital                                                                        3,605,079       4,417,339
Working capital ratio                                                                      1.2:1           1.2:1

Weighted average number of common shares outstanding                                   3,155,000       3,066,851
(basic and diluted)
Common shares outstanding                                                              3,155,000       3,155,000
</TABLE>


RESULTS OF OPERATIONS

Nine month period ended October 31, 2005 compared to nine month period ended
October 31, 2004.

Sales for the nine month period ended October 31, 2005 were $35,667,662, a 10.6%
increase over last year's sales of $32,237,998. Dectron's sales growth is due
primarily to its stronger presence and focus in the Canadian and international
markets for commercial HVAC products and related services. The U.S. market has
remained relatively stable year over year.

Gross profit decreased by 7% ($626,487) to $8,283,513 over the same period. As a
percentage of sales, gross profit decreased from 27.6% to 23.2%. Despite certain
productivity gains, the gross profit margin was adversely affected by higher raw
material costs, specifically metal prices, and downward price pressure in
certain key HVAC markets.

                                       6
<PAGE>

Selling expenses increased by 6% ($216,312) in the nine month period ended
October, 2005 to $3,806,205 from $3,589,893. However as a percentage of sales,
selling expenses decreased from 11.1% to 10.7%. The increase is due to foreign
exchange fluctuations, in the home currency, selling expenses decreased slightly
in the first nine months versus the same period last year.

General and administrative expenses increased by 11.8% ($277,127) to $2,620,828
compared to $2,343,701 for the period ended October 31, 2004. As a percentage of
sales, general and administrative increased from 7.3% to 7.4%. The increase is
again primarily attributable to the appreciation of the Canadian dollar versus
the U.S. dollar.

Depreciation and amortization expense increased slightly to $974,791 in the nine
month period ending October 31, 2005 compared to $944,653 in the nine-month
period ending October 31, 2004 as a result of the acquisition of new machinery
and equipment during the last fiscal year.

Interest expense decreased from $1,053,807 to $640,149, a decrease of $413,658
(39.3%). The lower interest expense is due primarily to repayments of short-term
debt and long-term debt during the current fiscal year. Another element of the
decrease is the lower U.S. dollar rate versus the Canadian dollar used for
conversion.

The company's effective income tax rate remained stable at 31.1% for the nine
month ended October 31, 2005. Tax expense did decrease by $228,630 as a result
of lower earnings.

Net earnings before discontinued operations were $166,518 compared to $674,294
for the nine month period ending October 31, 2004. As a percentage of sales, net
earnings before discontinued operations decrease from 2.1% to 0.5%.

Losses from discontinued operations (net of taxes) for the nine month period
ending October 31, 2005 was $747,854 compared to $911,019 in the corresponding
period in 2004, both resulting from the discontinued operations of Liberty Drive
Property, Inc.

Gain on disposal of discontinued operations (net of taxes) was $194,318 for the
nine month period ending October 31, 2005 compared to $731,512 for the
corresponding period in 2004.

As a result of the above factors, net losses for the nine month period ending
October 31, 2005 was $387,018 compared to earnings of $494,787 for the
corresponding period in 2004.


Three month period ended October 31, 2005 compared to Three month period ended
October 31, 2004.

Sales for the three month period ended October 31, 2005 were $11,860,388, at
7.6% increase over the prior year's sales of $11,020,743. Dectron's sales growth
is due primarily to its stronger presence and focus in the Canadian and
international markets for commercial HVAC products and related services.

Gross profit decreased by $173,038 to $2,720,998 over the same period. As a
percentage of sales, gross profit decreased from 26.3% to 22.9%. Despite certain
productivity gains, the gross profit margin was adversely affected by higher raw
material costs and aggressive pricing strategies in certain HVAC markets.

Selling expenses decreased by 0.6% ($6,522) in the three month period ended
October 31, 2005, to $1,172,191 from $1,178,713 for the corresponding period
ended October 31, 2004. As a percentage of sales, selling and marketing expenses
decreased from 10.7% to 9.9%.

General and administrative expenses increased by (22.2%) $161,023 to $885,216
compared to $724,193 for the period ended October 31, 2004. As a percentage of
sales, general and administrative increased to 7.5% from 6.6%.

                                       7
<PAGE>

Depreciation and amortization expense increased slightly to $330,501 in the
three month period ending October 31, 2005 from $325,917 in 2004 following the
acquisition of new machinery and equipment during the last fiscal year.

Financial expenses decreased to $242,004 in the third quarter of 2004 from
$615,179 from the third quarter of last year - a decrease of 60.7% ($373,175).
The decrease is due to the repayment of debt in the quarter along with the
effect of a weaker U.S. dollar versus the Canadian dollar used for conversion.

The income tax expense increased, by $19,955 to $34,578 in 2005 from $14,623 in
the third quarter of 2004, due to an increase in taxable income.

Net earnings before discontinued operation was $56,508 for the three-month
period ending October 31, 2005 compared to $35,411 for the three month period
ending October 31, 2004.

Earnings from discontinued operations (net of taxes) for the three month period
ending October 31, 2005 was $29,204 compared to $38,786 in the corresponding
period in 2004, both resulting from the discontinued operations of Liberty Drive
Property, Inc.

Gain on disposal of discontinued operations (net of taxes) was $68,385 for the
three month period ending October 31, 2005 compared to $180,836 for the
comparative period in 2004.

As a result of the above factors, net earnings for the three month period ending
October 31, 2005 was $154,097 compared to earnings of $255,033 for the
corresponding period in 2004

LIQUIDITY AND CAPITAL RESOURCES

In the nine months ended October 31, 2005, Dectron generated cash of $1,669,387
compared to using $1,216,012 in the nine month period ended October 31, 2004.
The principal sources of cash were from the disposal of discontinued operations
in the amount of $2,469,578, from accounts payables in the amount of $ 2,504,589
and from depreciation and amortization in the amount of $ 974,791. The principal
uses of cash were re-payment of long-term debt in the amount of $ 2,692,357 and
an increase in accounts receivables of $ 2,049,364. Foreign exchange provided $
117,123 of cash versus providing $ 351,760 in 2004


OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements.


CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

Our significant contractual obligations as of October 31, 2005 are for debt and
operating leases. Debt by year of maturity and future rental payments under
operating lease agreements are presented below. As of October 31, 2005, we had
an outstanding balance on our line of credit of $11,749,863 and do not have any
purchase obligations. We have not engaged in off-balance sheet financing,
commodity contract trading or significant related party transactions.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
CONTRACTUAL OBLIGATIONS             PAYMENTS DUE BY PERIOD

------------------------------------------------------------------------------------------------------------------------
                                         Total       Less than 1 year    1-3 years       4-5 years      After 5 years
------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>               <C>
Balance of Sale                             122,539           122,539               -            -              -

------------------------------------------------------------------------------------------------------------------------
Other long term debt                      1,904,887           422,247         907,071      251,853        323,716

------------------------------------------------------------------------------------------------------------------------
Total Long term debt                      2,027,426           544,786         907,071      251,853        323,716

------------------------------------------------------------------------------------------------------------------------
Operating leases                          5,700,756           925,691       1,587,164    1,510,603      1,677,298

------------------------------------------------------------------------------------------------------------------------
</TABLE>
Management believes that these commitments will be satisfied with current
operating cash flow.


                                       8
<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Market Risk and Risk Management

Dectron is exposed to fluctuations in foreign currency exchange rates and
interest rates. To manage certain of those exposures, we use futures, options
and swaps. The instruments we utilize in our hedging activities are viewed as
risk management tools, involve little complexity and are not used for trading or
speculative purposes. Management believes that we satisfactorily diversify the
counterparts used and monitor the concentration of risk to limit our counterpart
exposure.

Interest Rate Risk

Dectron is exposed to market risk related to fluctuations in interest rates on
its debt. Increases in prevailing interest rates could increase our interest
payment obligations relating to variable rate debt. For example, a 100 basis
point increase in interest rates would increase annual interest expense by
$125,000.


OUTLOOK

While the demand for its products has held steady due to a favorable economic
environment in recent years, the Company has nevertheless faced fierce
competition in the North American HVAC industry, a significant appreciation in
the Canadian dollar and a sharp rise in raw material costs. What's more, the
initially established manufacturing capacity, based on greater demand notably
from the high-technology sector, had to be reduced. Dectron's results have
therefore been adversely affected by several divestitures in recent years.

Management believes that the Canadian dollar and raw material prices have
stabilized and that progress has been made in regard to productivity. In fact,
various manufacturing operations have been consolidated and certain
non-strategic low-yielding assets have been sold . Accordingly, the Company does
not expect to incur any significant losses from discontinued operations for the
current fiscal year.

Based on selective price increases and further improvements in efficiency,
management is confident that the Company's profit margins will rebound in the
mid-term to historical levels starting in the last quarter of this fiscal year
and continuing into the next fiscal year . In addition, Dectron's growth
markets, specifically indoor air security and water generation, are expected to
bring substantial sales, which would have a direct impact on the Company's
overall profitability. All in all, management feels that Dectron now benefits
from a stronger foundation to drive sustained growth and profitability.

ITEM 4.  CONTROLS AND PROCEDURES

Dectron believes it is critical to provide investors and other users of its
financial statements with information that is relevant, objective,
understandable and timely, so that they can make informed decisions. As a
result, Dectron has established and we maintain accounting systems and practices
and internal control processes designed to provide reasonable assurance that
transactions are properly executed and recorded and that our policies and
procedures are carried out appropriately.

                                       9
<PAGE>

Dectron's management team is committed to providing high-quality, relevant and
timely information about its businesses. Management performs reviews of each of
its businesses throughout the year, addressing issues ranging from financial
performance and strategy to personnel and compliance.

Management is responsible for implementing and maintaining adequate systems of
internal and disclosure controls and procedures and for monitoring their
effectiveness.

Dectron's management team evaluate the effectiveness of the design and operation
of its "disclosure controls and procedures" ("Disclosure Controls") pursuant to
Rules 13a-14(c) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and our "internal controls and procedures for financial
reporting" (Internal Controls) as of the end of the period covered by this
Quarterly Report on Form 10-Q. This evaluation was done under the supervision
and with the participation of management.

o Disclosure Controls are procedures that are designed with the objective of
ensuring that information required to be disclosed in Dectron's reports filed
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC's rules and forms. Disclosure Controls are
also designed with the objective of ensuring that such information is
accumulated and communicated to management, including the Chief Executive
Officer to allow timely decisions regarding required disclosure.

o Internal Controls are procedures which are designed with the objective of
providing reasonable assurance that (1) Dectron's transactions are properly
authorized; (2) its assets are safeguarded against unauthorized or improper use;
and (3) transactions are properly recorded and reported, all to permit the
preparation of Dectron's financial statements in conformity with generally
accepted accounting principles in the United States Of America.

There are inherent limitations to the effectiveness of any system of disclosure
controls and procedures, including the possibility of human error and the
circumvention or overriding of the controls and procedures. Accordingly, even
effective disclosure controls and procedures can only provide reasonable
assurance of achieving their control objectives

Based upon management's evaluation, Dectron's Chief Executive Officer and Chief
Financial Officer have concluded that, as of October 31, 2005, the disclosure
and internal accounting controls provide reasonable assurance that information
required to be disclosed in the reports that we file under the Exchange Act is
recorded, processed, summarized and reported as and when required, including
with specific reference that Dectron's assets are safeguarded, transactions are
executed in accordance with management's authorizations and the financial
records are reliable for the purpose of preparing financial statements.

There were no significant changes in internal and disclosure controls or in
other factors that could significantly affect such internal and disclosure
controls subsequent to the date of their evaluation.

PART II OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS
None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.

                                       10
<PAGE>

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.

ITEM 5. OTHER INFORMATION
None.

ITEM 6. EXHIBITS

(a)      Exhibits

31.1     Certification of the Chief Executive Officer filed herewith pursuant to
         Section 302 of the Sarbanes-Oxley Act of 2002.

31.2     Certification of the Chief Financial Officer filed herewith pursuant to
         Section 302 of the Sarbanes-Oxley Act of 2002.

32.1     Certification of the Chief Executive Officer furnished herewith
         pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2     Certification of the Chief Financial Officer furnished herewith
         pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




                                       11
<PAGE>

                                   SIGNATURES

 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                     DECTRON INTERNATIONALE INC.



December 15 2005                    By:  s: Mauro Parissi
                                        --------------------------------
                                        Mauro Parissi
                                        Chief Financial Officer



                                       12



<PAGE>









                          [DECTRON INTERNATIONAL LOGO]






                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                OCTOBER 31, 2005




<PAGE>










                           DECTRON INTERNATIONALE INC.
                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                OCTOBER 31, 2005





                                TABLE OF CONTENTS




Interim Consolidated Balance Sheets                                   2 - 3

Interim Consolidated Statements of Operations                         4 - 5

Interim Consolidated Statements of Cash Flows                         6 - 8

Interim Consolidated Statements of Stockholders' Equity                   9

Notes to Interim Consolidated Financial Statements                 10  - 15




Schwartz Levitsky Feldman  LLP
COMPTABLES AGREES
CHARTERED ACCOUNTANTS
MONTREAL, TORONTO, OTTAWA



1980, rue Sherbrooke Ouest, 10e etage
Montreal (Quebec) H3H 1E8
Tel: 514 937 6392
Fax: 514 933 9710

<PAGE>

DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED BALANCE SHEETS
AS AT OCTOBER 31, 2005 AND JANUARY 31, 2005

(Amounts Expressed in United States Dollars)                              PAGE 2
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>

                                                                                 OCTOBER 31, 2005     JANUARY 31, 2005
                                                                                 ------------------   ------------------

<S>                                                                              <C>                  <C>
 ASSETS

 CURRENT

      Cash                                                                       $      2,744,607     $      1,075,220
      Accounts receivable                                                              11,729,614            9,680,250
      Income taxes receivable                                                              57,343               87,805
      Inventory                                                                         9,296,839           10,044,194
      Prepaid expenses and sundry assets                                                  605,492              568,976
      Loans receivable                                                                    109,627               68,836
      Current assets held by discontinued operations                                       49,545            3,414,543
                                                                                 ------------------   ------------------

                                                                                       24,593,067           24,939,824

 LOANS RECEIVABLE                                                                       1,711,172            1,210,989

 PROPERTY, PLANT AND EQUIPMENT                                                          7,088,574            7,541,579

 INTANGIBLES                                                                               71,506               79,963

 GOODWILL                                                                               1,745,522            1,661,144

 DEFERRED INCOME TAXES                                                                    257,432              254,419
                                                                                 ------------------   ------------------

                                                                                 $     35,467,273     $     35,687,918
                                                                                 ==================   ==================
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-2
<PAGE>


DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED BALANCE SHEETS
AS AT OCTOBER 31, 2005 AND JANUARY 31, 2005

(Amounts Expressed in United States Dollars)                              PAGE 3
--------------------------------------------------------------------------------



<TABLE>
<CAPTION>
                                                               OCTOBER 31, 2005     JANUARY 31, 2005
                                                               ----------------     ----------------

<S>                                                             <C>                  <C>
LIABILITIES

CURRENT

     Bank loans                                                 $ 11,749,863         $ 11,642,981
     Accounts payable and accrued expenses                         8,688,759            6,184,170
     Current portion of long-term debt                               544,786            2,348,870
     Deferred revenue                                                  4,580                4,580
     Current liabilities held by discontinued operations                   -              341,884
                                                                ------------         ------------

                                                                  20,987,988           20,522,485

LONG-TERM DEBT                                                     1,482,640            2,370,913

DEFERRED REVENUE                                                   1,338,399            1,477,153
                                                                ------------         ------------

                                                                  23,809,027           24,370,551
                                                                ------------         ------------

STOCKHOLDERS' EQUITY

CAPITAL STOCK  (NOTE 3)                                            7,038,835            6,873,335

TREASURY STOCK                                                       (88,780)             (88,780)

ACCUMULATED OTHER COMPREHENSIVE INCOME                             2,866,892            2,304,495

RETAINED EARNINGS                                                  1,841,299            2,228,317
                                                                ------------         ------------

                                                                  11,658,246           11,317,367
                                                                ------------         ------------

                                                                $ 35,467,273         $ 35,687,918
                                                                ============         ============
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-3
<PAGE>

DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE NINE MONTH PERIOD ENDED OCTOBER 31, 2005 AND 2004

(Amounts Expressed in United States Dollars)                              PAGE 4
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                NINE MONTH ENDED     NINE MONTH ENDED
                                                                OCTOBER 31, 2005     OCTOBER 31, 2004
                                                               -----------------     -----------------
<S>                                                              <C>                  <C>
SALES                                                            $ 35,667,662         $ 32,237,998

     Cost of sales                                                 27,384,149           23,327,998
                                                                 ------------         ------------

GROSS PROFIT                                                        8,283,513            8,910,000
                                                                 ------------         ------------

OPERATING EXPENSES

     Selling                                                        3,806,205            3,589,893
     General and administrative                                     2,620,828            2,343,701
     Depreciation and amortization                                    974,791              944,653
     Interest expense                                                 640,149            1,053,807
                                                                 ------------         ------------

                                                                    8,041,973            7,932,054
                                                                 ------------         ------------


EARNING BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS               241,540              977,946

     Income taxes                                                      75,022              303,652
                                                                 ------------         ------------

EARNINGS BEFORE DISCONTINUED OPERATIONS                               166,518              674,294

     Loss from discontinued operations, net of tax                   (747,854)            (911,019)
     Gain on disposal of discontinued operations, net of
      tax                                                             194,318              731,512
                                                                 ------------         ------------

NET EARNINGS (LOSS)                                              $   (387,018)        $    494,787
                                                                 ============         ============

NET EARNINGS (LOSS) PER COMMON SHARE, BASIC AND DILUTED
      Continuing operation                                       $       0.05         $       0.22
      Discontinued operation                                            (0.24)               (0.30)
      Disposal of discontinued operations                                0.06                 0.24

                                                                 ------------         ------------
                                                                 $      (0.13)        $       0.16
                                                                 ============         ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
      Basic and Diluted                                             3,155,000            3,037,254

</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.


                                      F-4
<PAGE>

DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTH PERIOD ENDED OCTOBER 31, 2005 AND 2004

(Amounts Expressed in United States Dollars)                             PAGE 5
-------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                               THREE MONTH ENDED   THREE MONTH ENDED
                                                               OCTOBER 31, 2005    OCTOBER 31, 2004
                                                               -----------------   -----------------

<S>                                                               <C>                <C>
SALES                                                             $11,860,388        $11,020,743

     Cost of sales                                                  9,139,390          8,126,707
                                                                  -----------        -----------

GROSS PROFIT                                                        2,720,998          2,894,036
                                                                  -----------        -----------

OPERATING EXPENSES

     Selling                                                        1,172,191          1,178,713
     General and administrative                                       885,216            724,193
     Depreciation and amortization                                    330,501            325,917
     Interest expense                                                 242,004            615,179
                                                                  -----------        -----------

                                                                    2,629,912          2,844,002
                                                                  -----------        -----------


EARNING BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS                91,086             50,034

     Income taxes                                                      34,578             14,623
                                                                  -----------        -----------

EARNINGS BEFORE DISCONTINUED OPERATIONS                                56,508             35,411

       Earnings from discontinued operations, net of tax               29,204             38,786
       Gain on disposal of discontinued operations, net
        of tax                                                         68,385            180,836
                                                                  -----------        -----------

NET EARNINGS                                                      $   154,097        $   255,033
                                                                  ===========        ===========

NET EARNINGS  PER COMMON SHARE, BASIC AND DILUTED
      Continuing operation                                        $      0.02        $      0.01
      Discontinued operation                                             0.01               0.01
      Disposal of discontinued operations                                0.02               0.06
                                                                  -----------        -----------
                                                                  $      0.05        $      0.08
                                                                  ===========        ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
      Basic and Diluted                                             3,155,000          3,037,254
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-5
<PAGE>

DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIOD ENDED OCTOBER 31, 2005 AND 2004

(Amounts Expressed in United States Dollars)                             PAGE 6
-------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                                   NINE MONTH ENDED     NINE MONTH ENDED
                                                                                   OCTOBER 31, 2005     OCTOBER 31, 2004
                                                                                   ----------------     -----------------

<S>                                                                                   <C>                 <C>
OPERATING ACTIVITIES

Net earnings from continuing operations                                               $   166,518         $   674,294


Adjustments to reconcile net earnings to net cash provided (used in) operating
activities:
     Depreciation and amortization                                                        974,791             944,653
     Increase in accounts receivable                                                   (2,049,364)         (1,639,612)
     Decrease in income taxes receivable                                                   30,462                   -
     Decrease (increase) in inventory                                                     747,355            (882,933)
     Increase in prepaid expenses and sundry assets                                       (36,516)           (589,258)
     Increase in deferred income taxes                                                     (3,013)            (20,552)
     Increase  in accounts payable and accrued expenses                                 2,504,589           1,227,892
     Increase in income taxes payable                                                           -              (3,298)
     Increase (decrease) in deferred revenue                                             (138,754)            230,867
                                                                                      -----------         -----------

Net cash provided by (used in) operating activities                                     2,196,068             (57,947)
                                                                                      -----------         -----------
</TABLE>



The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-6
<PAGE>

DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE NINE MONTH PERIOD ENDED OCTOBER 31, 2005 AND 2004

(Amounts Expressed in United States Dollars)                              PAGE 7
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>

                                                               NINE MONTH ENDED   NINE MONTH ENDED
                                                               OCTOBER 31, 2005   OCTOBER 31, 2004
                                                               ----------------   -----------------
<S>                                                                <C>                <C>
INVESTING ACTIVITIES

     Acquisition of property, plant and equipment                  (152,433)          (237,985)
                                                                 ----------         ----------

Net cash used in investing activities                              (152,433)          (237,985)
                                                                 ----------         ----------

FINANCING ACTIVITIES

     Repayments of share purchase plan                              165,500                  -
     Advances to loans receivable                                  (540,974)          (259,550)
     Advances from (repayments of) bank loans                       106,882           (943,896)
     Repayments of long-term debt                                (2,692,357)        (1,311,636)
     Issuance of shares                                                   -            543,750
     Advance from balance of sales                                        -           (250,000)
                                                                 ----------         ----------

Net cash used in financing activities                            (2,960,949)        (2,221,332)
                                                                 ----------         ----------

EFFECT OF FOREIGN CURRENCY EXCHANGE RATE ON CASH AND CASH
EQUIVALENTS                                                         117,123            351,760
                                                                 ----------         ----------

EFFECT OF DISCONTINUED OPERATIONS                                 2,469,578            949,492
                                                                 ----------         ----------
</TABLE>



The accompanying notes are an integral part of these consolidated financial
statements.


                                      F-7
<PAGE>

DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE NINE MONTH PERIOD ENDED OCTOBER 31, 2005 AND 2004

(Amounts Expressed in United States Dollars)                             PAGE 8
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                          NINE MONTH ENDED   NINE MONTH ENDED
                                                          OCTOBER 31, 2005   OCTOBER 31, 2004
                                                          ----------------   ----------------

<S>                                                           <C>               <C>
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS          1,669,387         (1,216,012)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                  1,075,220          2,457,346
                                                            -----------        -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                    $ 2,744,607        $ 1,241,334
                                                            ===========        ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

     INTEREST PAID                                          $   668,844        $   700,515
                                                            ===========        ===========

     INCOME TAXES PAID                                      $   221,211        $   443,940
                                                            ===========        ===========

</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-8
<PAGE>

DECTRON INTERNATIONALE INC.
INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTH PERIOD ENDED OCTOBER 31, 2005

(Amounts Expressed in United States Dollars)                              PAGE 9
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                     CUMULATIVE            OTHER
                                                                      RETAINED         COMPREHENSIVE          TREASURY
                                    NUMBER           AMOUNT            EARNINGS            INCOME              STOCK
                                    ------           ------            --------            ------              -----

<S>                                <C>             <C>                <C>                <C>                <C>
Balance January 31, 2002           2,795,000       $ 6,752,933        $ 3,778,015        $  (591,822)       $   (88,780)
                                   =========       ===========        ===========        ===========        ===========

Share purchase plan
receivable                                 -       $  (119,010)       $         -        $         -        $         -
Issuance of shares                   124,500           502,300                  -                  -                  -
Foreign currency translation               -                 -                  -            463,058                  -
Net loss for the year                      -                 -          1,136,212                  -                  -
                                   ---------       -----------        -----------        -----------        -----------

Balance January 31, 2003           2,919,500       $ 7,136,223        $ 4,914,227        $  (128,764)       $   (88,780)
                                   =========       ===========        ===========        ===========        ===========

Share purchase plan
receivable                                 -       $  (170,819)       $         -        $         -        $         -
Issuance of shares                    54,250           162,750                  -                  -                  -
Foreign currency translation               -                 -                  -          1,692,836                  -
Net loss for the year                      -                 -         (1,697,504)                 -                  -
                                   ---------       -----------        -----------        -----------        -----------

Balance January 31, 2004           2,973,750       $ 7,128,154        $ 3,216,723        $ 1,564,072        $   (88,780)
                                   =========       ===========        ===========        ===========        ===========

Share purchase plan
receivable                                 -       $  (798,569)       $         -        $         -        $         -
Issuance of shares                   181,250           543,750                  -                  -                  -
Foreign currency translation               -                 -                  -            740,423                  -
Net loss for the year
                                           -                 -           (988,406)                 -                  -
                                   ---------       -----------        -----------        -----------        -----------

Balance, January 31, 2005          3,155,000       $ 6,873,335        $ 2,228,317        $ 2,304,495        $   (88,780)
                                   =========       ===========        ===========        ===========        ===========



Share purchase plan
receivable                                 -       $   165,500        $         -        $         -        $         -
Issuance of shares                         -                 -                  -                  -                  -
Foreign currency translation               -                 -                  -           (562,397)                 -
Net loss for the period                    -                 -           (387,018)                 -                  -
                                   ---------       -----------        -----------        -----------        -----------

Balance, October 31, 2005          3,155,000       $ 7,038,835        $ 1,841,299        $ 2,866,892        $   (88,780)
                                   =========       ===========        ===========        ===========        ===========
</TABLE>



The accompanying notes are an integral part of these consolidated financial
statements.


                                      F-9
<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2005 AND JANUARY 31, 2005

(Amounts Expressed in United States Dollars)                             PAGE 10
--------------------------------------------------------------------------------



1.    NOTICE OF NO AUDITOR REVIEW OF THE INTERIM CONSOLIDATED FINANCIAL

      The interim consolidated financial statements are the responsibility of
      the Company's management and have been approved by its Board of Directors.
      The Company's independent auditor has not performed a review of these
      Interim financial statements in accordance with the standards established
      by the Canadian Institute of Chartered Accountants for a review of interim
      financial statements by an entity's auditor.

2.    SIGNIFICANT ACCOUNTING POLICIES

      These unaudited interim consolidated financial statements have been
      prepared in accordance with United State generally accepted accounting
      principles, using the same accounting principles as those mentioned in
      Note 1 to the consolidated financial statements for the year ended January
      31, 2005. The unaudited interim consolidated financial statements should
      be read in conjunction with the consolidated financial statements and the
      notes thereto for the year ended January 31, 2005. These consolidated
      financial statements require management to make estimates and assumptions
      that affect the reported amounts in the consolidated financial statements
      and the notes thereto. Actual results could differ from these estimates.

      BASIS OF CONSOLIDATED FINANCIAL STATEMENTS PRESENTATION

      These consolidated financial statements include the accounts of Dectron
      Internationale Inc., Dectron Inc. Consolidated, Circul-aire Group and
      International Water Makers Inc.

      Dectron Inc. Consolidated is comprised of Dectron Inc. and of its
      wholly-owned subsidiaries, Refplus Inc., Thermoplus Air Inc., Dectron
      U.S.A. Inc. and Liberty Drive Property, Inc. (formely Ipac 2000 Inc).

      Circul-aire Group is comprised of Cascade Technologies Inc., and of its
      wholly-owned subsidiaries, Purafil Canada Inc. and Circul-aire Inc. and
      its wholly-owned subsidiary Tranzmetal Inc.

      All inter-company profits, transactions and account balances have been
      eliminated.

      FOREIGN CURRENCY TRANSLATION

      The company maintains its books and records in Canadian dollars. The
      operation of the company's subsidiary in the United States is an
      integrated corporation. As a result, monetary assets and liabilities in
      foreign currency are translated into Canadian dollars at exchange rates in
      effect at the balance sheet date, whereas non-monetary assets and
      liabilities are translated at the average exchange rates in effect at
      transaction dates. Income and expenses in foreign currency are translated
      at the average rate effective during the year with the exception of
      depreciation and amortization, which is translated at the historical rate.
      Gains and losses resulting from the translation of foreign currency
      transactions are included in earnings.


                                      F-10
<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2005 AND JANUARY 31, 2005

(Amounts Expressed in United States Dollars)                             PAGE 11
--------------------------------------------------------------------------------



2.    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      FOREIGN CURRENCY TRANSLATION (CONTINUED)

      The translation of the financial statements from Canadian dollars into
      United States dollars is performed for the convenience of the reader.
      Balance sheet accounts are translated using closing exchange rates in
      effect at the balance sheet date and income and expense accounts are
      translated using an average exchange rate prevailing during each reporting
      period. No representation is made that the Canadian dollar amounts could
      have been, or could be, converted into United States dollars at the rates
      on the respective dates and or at any other certain rates. Adjustments
      resulting from the translation are included in the accumulated other
      comprehensive income in stockholder's equity.

      RECENT ACCOUNTING CHANGES

       a)   On December 16, 2004, the FASB issued SFAS 123 (R), "Share-Based
            Payment," which is a revision of SFAS 123, "Accounting for
            Stock-Based Compensation." SFAS 123(R) requires all share-based
            payments to employees, including grants of employee stock options,
            to be recognized in the income statement based on their fair values.
            Pro forma disclosure is no longer an alternative. SFAS 123(R) must
            be adopted no later than August 1, 2005. Early adoption is
            permitted. The Company expects to adopt SFAS 123(R) on August 1,
            2005, utilizing the modified retrospective method. The modified
            retrospective method requires compensation costs to be recognized
            beginning with the effective date based on the requirements of SFAS
            123(R) for all (a) share-based payments granted after the effective
            date and (b) awards granted to employees prior to the effective date
            of SFAS 123(R) that remain unvested on the effective date. Amounts
            for prior years will be restated based on the amounts previously
            recognized under SFAS 123 for purposes of pro forma disclosures. As
            permitted by SFAS 123, the Company currently accounts for
            share-based payments to employees using APB Opinion 25's intrinsic
            value method and, as such, generally recognizes no compensation cost
            for employee stock options. Accordingly, the adoption of SFAS
            123(R)'s fair value method will have a significant impact on the
            Company's results of operations, although it will have no impact on
            the Company's overall financial position. The impact of the adoption
            of SFAS 123(R) cannot be predicted at this time because it will
            depend on levels of share-based payments granted in the future.

       b)   In November 2004, the FASB issued SFAS 151, "Inventory Costs - an
            amendment of ARB No.43, Chapter 4," which requires companies to
            expense abnormal freight, handling costs, or spoilage in the period
            incurred and to allocate fixed overhead based on normal capacity,
            with adjustment if production is abnormally high. This standard
            becomes effective for the Company on August 1, 2005, with early
            adoption permitted. The Company currently accounts for abnormal
            freight, handling costs, and spoilage consistent with the standard.
            The Company plans to adopt the provisions early, on a prospective
            basis, as they relate to capitalization of fixed overhead expenses
            in the first quarter of 2006. The Company is currently evaluating
            the effects of implementing this standard. Based on a preliminary
            analysis, the Company does not expect that there will be a material
            effect on 2006 total Company results. There may be an impact on the
            results of certain quarters at the segment or total Company level.


                                      F-11
<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2005 AND JANUARY 31, 2005

(Amounts Expressed in United States Dollars)                            PAGE 12
-------------------------------------------------------------------------------



3.    CAPITAL STOCK

      Authorized

          An unlimited number of preferred shares, cumulative, voting,
      no par value

          An unlimited number of common shares, voting, no par value

      Issued
<TABLE>
<CAPTION>
                                                                 OCTOBER 31,               JANUARY 31,
                                                                    2005                     2005
                                                               ---------------            ------------

<S>                                                            <C>                               <C>
               3,155,000 Common shares                         $     7,038,835            $6,873,335
                                                               ===============            ==========
</TABLE>


      During the fiscal year ended January 31, 2005, certain employees have
      exercised their options under the 1999 Stock Option Plan. Consequently,
      181,250 common shares were issued for a total consideration of $543,750.

      EMPLOYEE STOCK OPTION PLAN

      In 1999, the Company adopted a Stock Option Plan (the "1999 Plan")
      pursuant to which 650,000 shares of Common Stock are reserved for
      issuance, no options are currently issued and outstanding since the plan
      expired in November 2004.

      On September 2, 1999, the Board granted options under the Stock Option
      Plan to certain members of the Board and certain employees. Subject to
      certain limitations, the options granted are exercisable one year after
      issuance. Subsequent to the one-year anniversary date of the grant, the
      option holders may exercise the option up to 25% of the total options per
      year for the following four years. Each of the options were fully
      exercisable on November 4, 2003, and expire on November 4, 2004. The
      exercise price of the option is $3.00.

      In 2001, the Company also adopted the 2001 Stock Option Plan (the "2001
      Plan") pursuant to which 500,000 shares of Common stock are reserved for
      issuance, 108,500 options are currently issued and outstanding.

      On January 4, 2002, the Board granted options under the 2001 Plan to
      certain members of the Board and certain employees. Subject to certain
      limitations, the options granted are exercisable one year after issuance.
      Subsequent to the one-year anniversary date of the grant, the option
      holders may exercise the option up to 25% per year of the total options
      granted for the following four years. Each of the options will be fully
      exercisable on January 4, 2006 and expire on January 4, 2011. The exercise
      price of the option is $4.20.


                                      F-12
<PAGE>

DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2005 AND JANUARY 31, 2005

(Amounts Expressed in United States Dollars)                            PAGE 13
-------------------------------------------------------------------------------




3.    CAPITAL STOCK (CONTINUED)

      EMPLOYEE STOCK OPTION PLAN (CONTINUED)

      The Plans are administered by the Board of Directors, who will determine,
      among other things, those individuals who shall receive options, the time
      period during which the options may be partially or fully exercised, the
      number of shares of Common Stock issuable upon the exercise of the options
      and the option exercise price.

      The 1999 Plan is effective for a period of five years expiring in 2004 and
      the 2001 Plan is effective for a period of ten years expiring in 2011.
      Options may be granted to officers, directors, consultants, key employees,
      advisors and similar parties who provide the company with their skills and
      expertise. Options granted under the 1999 Plan may be exercisable for up
      to five years, and ten years for the 2001 Plan, and shall be at an
      exercise price as determined by the Board. Options are non-transferable
      except by the laws of descent and distribution or a change in control of
      Dectron, as defined in the Plans, and are exercisable only by the
      participant during his or her lifetime. Change in control include (i) the
      sale of substantially all of the assets of Dectron and merger or
      consolidation with another company, or (ii) a majority of the Board
      changes other than by election by the stockholders pursuant to Board
      solicitation or by vacancies filled by the Board caused by death or
      resignation of such person.

      If a participant ceases affiliation with Dectron by reason of death,
      permanent disability or retirement at or after age 70, the option remains
      exercisable for one year from such occurrence but not beyond the option's
      expiration date. Other types of termination allow the participant three
      months to exercise, except for termination for cause, which results in
      immediate termination of the option.

      Option under the Plans must be issued within five years from the effective
      date of the 1999 Plan and ten years from the effective date of the 2001
      Plan.

      Any unexercised options that expire or that terminate upon an employee's
      ceasing to be employed by the company become available again for issuance
      under the Plans.

      The Plans may be terminated or amended at any time by the Board of
      Directors, except that the number of shares of Common Stock reserved for
      issuance upon the exercise of options granted under the Plans may not be
      increased without consent of the stockholders.


                                      F-13
<PAGE>


DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2005 AND JANUARY 31, 2005
(Amounts Expressed in United States Dollars)                             PAGE 14
--------------------------------------------------------------------------------



3.    CAPITAL STOCK (CONTINUED)

      EMPLOYEE STOCK OPTION PLAN (CONTINUED)

      A summary of the status of the company's stock option plans are as
follows:

<TABLE>
<CAPTION>
                                    OCTOBER 31, 2005                 JANUARY 31, 2005                   JANUARY 31, 2004
                              -----------------------------    -----------------------------    ---------------------------------
                                                 WEIGHTED                        WEIGHTED                          WEIGHTED
                                                 AVERAGE                         AVERAGE                           AVERAGE
                               NUMBER OF        EXERCISE        NUMBER OF        EXERCISE        NUMBER OF         EXERCISE
                                OPTIONS           PRICE          OPTIONS           PRICE          OPTIONS           PRICE
                              -------------    ------------    -------------   -------------    -------------   -----------------
<S>                                <C>         <C>                 <C>         <C>                  <C>         <C>
      Outstanding,               108,500       $     4.20          295,750     $       3.44         357,000     $      3.39
      beginning of year
      Granted                       -                  -              -                  -             -                -
      Exercised                     -                  -          (181,250)            3.00         (54,250)           3.00
      Cancelled                     -                  -            (6,000)            3.00          (7,000)           4.20
                              -------------    ------------    -------------   -------------    -------------   -----------------

      Outstanding, end of
      year                         108,500     $     4.20          108,500     $       4.20         295,750     $      3.44
                              =============    ============    =============   =============    =============   =================
      Options, exercisable,
      end of year                   81,375                          81,375                          235,250
                              =============                    =============                    =============
</TABLE>

      The following table summarizes information about fixed stock options
outstanding:

<TABLE>
<CAPTION>
                                                                            OCTOBER 31, 2005
                                         ----------------------------------------------------------------------------------------
                                                       OPTIONS OUTSTANDING                           OPTIONS EXERCISABLE
                                         -------------------------------------------------    -----------------------------------
                                                             WEIGHTED
                                                              AVERAGE
                                                             REMAINING         WEIGHTED                            WEIGHTED
                                                              YEARS OF         AVERAGE                              AVERAGE
                                           NUMBER OF        CONTRACTUAL        EXERCISE        NUMBER OF            EXERCISE
   Exercisable price                        OPTIONS             LIFE            PRICE           OPTIONS              PRICE
   -----------------                     ---------------    -------------    -------------    -------------    ------------------

<S>                                          <C>                 <C>         <C>               <C>                <C>
      $       3.00                              -                 -                    -             -                      -
              4.20                           108,500             5.9                 4.20          81,375                  4.20
                                         ---------------    -------------    -------------    --------------     ----------------

                                             108,500            5.9          $       4.20          81,375        $         4.20
                                         ===============    =============    =============    ==============     ================
</TABLE>

      SHARE PURCHASE PLAN RECEIVABLE

      The SEC staff Accounting Bulletins require that accounts or notes
      receivable arising from transactions involving capital stock should be
      presented as deductions from shareholders' equity and not as assets.
      Accordingly, in order to comply with U.S. GAAP, stockholders' equity has
      been reduced by $798,569 at January 31, 2005 (reduced by $170,819 - 2004),
      to reflect the loans due from certain employees and officers, which relate
      to the purchase of common shares of the company.


                                      F-14
<PAGE>


DECTRON INTERNATIONALE INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 OCTOBER 31, 2005 AND JANUARY 31, 2005
(Amounts Expressed in United States Dollars)                             PAGE 15
--------------------------------------------------------------------------------


4.   SEGMENTED INFORMATION

     a) The breakdown of sales by geographic area is as follows:


<TABLE>
<CAPTION>
                                                     3 MONTHS              3 MONTHS            9 MONTHS            9 MONTHS
                                                   OCTOBER 31,           OCTOBER 31,         OCTOBER 31,          OCTOBER 31,
                                                       2005                  2004                2005                 2004
                                                -------------------   ------------------------------------------------------------

<S>                                             <C>                   <C>                  <C>                <C>
          Canada                                $      5,497,467      $     6,221,733      $    20,001,548    $    17,948,533
          United States of America                     4,890,845            4,799,010           13,828,581         13,371,611
          International                                1,472,076                    -            1,837,533            917,854
                                                -------------------   ------------------------------------------------------------

                                                 $    11,860,388      $    11,020,743      $    35,667,662    $    32,237,998
                                                ===================   ============================================================
</TABLE>


     b) The breakdown of identifiable assets by geographic area are as follows:

<TABLE>
<CAPTION>
                                                   OCTOBER 31,           JANUARY 31,          OCTOBER 31,
                                                      2005                 2005                  2004
<S>                                             <C>                 <C>                   <C>
          Canada                                $      34,567,904   $      31,644,024     $      36,138,365
          United States                                   899,369           4,043,894             4,176,500
                                                --------------------------------------------------------------

                                                $      35,467,273   $      35,687,918     $      40,314,865
                                                ==============================================================
</TABLE>

4.    COMPARATIVE FIGURES

      Certain comparative figures in the October 2004 financial statements have
      been reclassified to conform with the basis of presentation used in
      October 2005.








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